The government is working to set up universal healthcare coverage this year, as a mandate from the 2004 social security law.

The policy, which would assure every citizen is insured through a social or commercial health insurance, is a target in President Susilo Bambang Yudhoyono's five-year plans.

"By 2014, every citizen will be insured regardless of healthcare quality, payment or contribution rates," said Chalik Masulili, the health minister's assistant for health financing and community empowerment.

The social security law mandates that realization of healthcare for all financed through taxes and contributions. The government is obliged to insure the poor, orphans and neglected elderly while the rest of the population should insure themselves or be insured by their employers.

Chalik said his ministry would rely on state-owned insurance companies and local administrations to extend the insurance coverage.He said some local administrations now have sponsored Jamkesda, the healthcare schemes for citizens that are financed by the regions' budgets and citizen contribution.

Amid high demand for access to quality healthcare, it is easy to mistake this latest healthcare plan as a blanket effort to help citizens afford better care.

In fact, the plan might only benefit care providers - hospitals, pharmaceutical and insurance companies - if it is not carefully implemented.

Healthcare is an expensive field, involving highly educated medics and paramedics, technologies and pharmaceutical companies. The high level of technology limits the number of possible providers in each country and consumers are constantly disadvantaged by information gaps despite vigorous market competition.

The recent ruckus over the US health system has its roots in this issue.

An article in Health Affairs in 2003 stated that high prices of healthcare in the country, which did not directly reflect costs, were the main reason why it spent more on healthcare than any OECD countries, but that citizens received poorer outcomes.

Money from households goes to providers through "a vast network of relatively uncoordinated pipes and capillaries of various sizes", leaving prices to be regulated by healthcare providers instead of relying on the balance of market demand and supply, the report said.

The WHO's National Health Account recorded that Indonesia's total spending on health stood at 2.5 percent of the country's GDP in 2007, lower than that of Thailand with 3.5 percent of GDP and Malaysia at 4.4 percent of GDP.

The government's healthcare program will increase the spending through a larger amount of fund allocated to improve Jamkesmas (public health insurance) coverage and through the improvement of citizens' contributions.

The increase in spending, however, might not directly translate into an improvement in the quality of care.

Chalik said the government acknowledged that boosting the spending might be futile if no measures were applied to control costs and quality of care. Providers might just end up disbursing insurance money for unnecessary medicines and treatments, he said.

To prevent unnecessary claims in Jamkesmas, Chalik said, the government has begun to implement a diagnosed-related group (DRG) system, a price-coded mechanism that would automatically give hospitals standard treatment and medicine necessary for a patient's case.

The code, which entails six digits representing type of illness, severity and class of health provider, would replace the a la carte payment system practiced in the country for decades, resulting in hefty hospital bills with meager quality of care.

"The coding would automatically reject non-relevant medicine or treatment suggested by the hospitals," Chalik said.

He claimed that of the 900 hospitals that have tried out the system this year, 90 percent succeeded in running it.

A draft bill on health insurers (RUU BPJS), which ensures that social insurance firms are non-profit entities, is also currently being deliberated at the House of Representatives and is set to be passed this year.

The regulation on social health insurers, Chalik said, was also a way to prevent profiteering by insurance companies, which could hurt the quality of healthcare.

Fachmi Idris from the National Social Security Council said that the government could not fully rely on the current health financing reform to improve healthcare quality in the country.

"The policy could be unstable if the government does not simultaneously support it with better public health system," he said. He added that health costs would be immense if the government only focused on helping the sick instead of looking at preventative measures.

The head of the Indonesian Pharmaceutical Companies Association, Anthony Charles Sunarjo, said the social health insurance system would benefit consumers as insurers would choose the lowest prices for medicines to keep their costs low.

"The competition to provide the cheapest medicine would push down prices," he said.

The president director of state-owned health insurance company PT Askes, I Gede Subawa, expressed concern at the implementation of the DRG system into the country's social health insurance.

"We welcome the plan, but need to study the system further because the prices might not be sufficient with the level of premiums," he said.

Subawa said the government should plan for realistic prices and clarify the benefits provided by the social health insurance.

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